Enterprise Products Partners L.P. (Enterprise Products Partners) and Duncan Energy Partners L.P. (Duncan Energy) have announced plans for their jointly-owned Acadian Gas LLC (Acadian Gas) subsidiary to extend its Louisiana intrastate natural gas pipeline system into Northwest Louisiana.
The extension of the pipeline system will provide producers in the rapidly expanding Haynesville Shale play with access to attractive markets through connections with Acadian’s existing 1,000-mile pipeline system in South Louisiana and nine major interstate pipelines.
Known as the Haynesville extension, this project, as currently designed, will have the capacity to transport up to 1.4 billion cubic feet per day (Bcf/d) from the Haynesville area through a 249-mile, 36-inch and 30-inch diameter pipeline that will connect to Acadian Gas’ existing system as well as its affiliated Cypress gas pipeline. If additional long-term commitments are received before pipe orders are placed within the next week, the capacity of the Haynesville Extension could be increased to 2.0 Bcf/d. The pipeline is expected to be in service in September 2011.
The existing Acadian natural gas pipeline system has access to more than 150 end-use markets along the Mississippi River corridor between Baton Rouge and New Orleans, includes a rapid-cycle salt dome storage cavern and has the ability to make physical deliveries into the Henry Hub. The Haynesville extension project will have two interconnects to the existing Acadian system in Pointe Coupee and Assumption parishes and will have two interconnections to the Cypress system in Pointe Coupee and West Baton Rouge parishes. The Haynesville Extension will also have interconnects with Florida Gas, Texas Eastern, Transco, Sonat, Columbia Gulf, Trunkline, ANR, Tennessee Gas and Texas Gas. Together with the capacity into the existing Acadian systems, the extension project will provide about 5.5 Bcf/d of meter capacity into an estimated 12 Bcf/d of available downstream pipeline takeaway capacity. Initially, the project will connect to nine Haynesville Shale producer locations in DeSoto and Red River parishes. As part of the project, Acadian expects to construct two compressor stations with about 67,000 combined horsepower.
“We are excited to announce our Haynesville Extension project,” said Richard H. Bachmann, president and chief executive officer of the general partner of Duncan Energy. “By leveraging our existing Acadian system, we will be able to provide Haynesville producers with much needed takeaway capacity in a timely manner. In addition, we believe the Haynesville Extension will give shippers more flexibility and market access to manage and maximize the value of their production.”
Along with much needed takeaway capacity for growing Haynesville production, the new pipeline is expected to give shippers the opportunity to benefit from more favorable pricing points and diverse service options and access to the South Louisiana marketplace. For producers, the more flexible contracting options associated with an intrastate environment would help facilitate a seamless transaction for the producer from field to end-user.
Michael A. Creel, president and chief executive officer of Enterprise Products Partners, stated, “Enterprise’s integrated midstream system already touches over 10 Bcf/d of natural gas, or approximately 17 percent of U.S. demand. The expansion of the Acadian system provides our partnership with another major foothold in a significant non-conventional natural gas producing area. In addition to the Haynesville, we have major midstream positions in the Jonah/Pinedale, Piceance, Barnett, Eagle Ford and Marcellus regions.”
The Haynesville Shale covers about 2 million acres in Northwest Louisiana, almost all of which is under lease. Production from the approximately 200 wells drilled to date is estimated at more than 1 Bcf/d. Over 400 locations are in various stages of drilling and completion with 150 rigs now working in the region.
Acadian Gas is 66% owned by Duncan Energy and 34% owned by Enterprise Products Partners.